My guess is it would be one of amazement. However, I am not so confident I could predict why. Are you amazed that as much as “a quarter” of all training is effectively wasted? Or are you amazed that it is only “a quarter” – i.e. as little as 25%?
How much training is really wasted?
I confess that I fall into the latter camp. Thus I would have said it was more likely to be the other way round. In other words training is closer to being only 25% effective and 75% wasted; although that isn’t to say the figures are quite as bad as that. Nor am I maligning the quality of trainers here. Rather it is simply a fact of life, for, when we get back into routine we simply revert to old ways. It is practice that embeds knowledge and if people do not get the opportunity to practice what they learn on training courses when they get back to work, it is inevitable that the benefits of the training will dissipate.
(I should also make it clear that I am talking here about formal work-related training only and not all education.)
My opinion that training is considerably more than 25% ineffective, may have its origins in the harsh reality that I am a bit slow! However, although clearly subjective, I formed it as much by observing others as from my own experience over nearly 30 years. I find it fascinating to observe how quickly we forget lessons and fall back into our old ways. It’s rather like New Year Resolutions. No matter how good our intentions, we fall short.
The costs are the real issue
So regardless of the percentage, there is a problem. The headline, from HR Magazine, was for real! And even more disturbing is that the report states this 25% ‘failure’ costs £9.5 billion a year, which is a steep price to pay for nothing. And if you share my more skeptical view, then these costs are likely to be considerably greater. This makes proposals to make regular training an employee’s legal right a real concern. It is dangerous for a number of reasons.
Firstly, it makes training more of a fixed cost, rather than a variable one. One of the (possibly many) reasons the UK government is proposing this, is that training is one of the first items dispensed with in recessionary times. Whatever the justification for this (and we will look at this question more closely further on) it will mean that businesses will need to look elsewhere and dig deeper to find cost savings in any future recession. This makes it likely that more people will lose their jobs than would otherwise be the case. It is thus hardly a good solution to the employee engagement problem that is currently causing so much concern.
Secondly, it reduces the likelihood of proper cost-benefit justification for training. And cost-benefit justification for training is already weak. Certainly you spend a great deal of effort on the cost side of the equation. No-one can undergo training unless there is a budget and/or the costs are pre-approved. But nothing like the same attention is given to the benefit side.
Ah, yes, you do devote effort to assessing needs through formal training needs analyses, and you could argue this equates to benefit analysis. However this ignores the obvious point that satisfying needs, and delivering benefits, is not the same thing. This point is reinforced by the earlier point about training being the first expense cut during tough trading times. This suggests that the benefits are not really factored into the equation.
The case for this is reinforced by two points: the value of the waste as described by the article, and the lack of any proper training effectiveness analysis. Training is an investment. Yet the lack of effectiveness measurement suggests this is not fully recognised. The fact is that a large proportion of this training waste can be avoided. All it requires is more emphasis on measuring the benefits – the return on investment.
Now you may argue that this is fine in theory but in practice measuring this is too difficult, time-consuming and costly, and so would make the problem worse. You might even claim that some of the benefits are intangible anyway in so far as they simply improve employee engagement. Perhaps, but the point is not worth arguing about.
How to effectively measure the return on training investment
Certainly it is not easy, and it would be disingenuous to say it was. But, if people are valued as assets and their training costs, or a portion of them, are capitalised and added to their individual asset value, then you would have a basis for more effective negotiation between manager and employee to justify the training as well as a measure of gauging its effectiveness. The net change in bottom line over the gross increase in Human Asset Value, gives you a perfectly empirical formula for calculating the return on investment. It may not be perfect, but it is at least as good if not better than anything we currently have.
Whatever the waste percentage, this formula certainly gives you a lever for eliminating a large chunk of it. Furthermore, as the rules need to be properly defined and agreed, it is not subjective and so cannot be easily manipulated. This will help build up trust and teamwork within the organisation. It will also encourage practice and so help to embed the knowledge. And, even better, it also provides a communication bridge for HR and Finance. Now, for the first time right brain (HR) and left brain (Finance) dominated people will be to communicate effectively. That has to be good news and great for business.
